Officials urged to be critical over FTA
Jakarta Post | 10 May 2007
Officials urged to be critical over FTA
Andi Haswidi, The Jakarta Post, Jakarta
Fearing that the gains promised by an ASEAN-EU free trade agreement (FTA) will turn out to be little more than illusions, a discussion has urged the members of ASEAN to stick together and remain "critical" during the upcoming negotiations.
"I predict that the EU will dominate trade relations in the ASEAN-EU FTA framework," said Beginda Pakpahan, a lecturer on international relations at the University of Indonesia.
"ASEAN government officials must adopt a critical stance against the EU, especially regarding the subject of flexibility in trade regulations in the FTA context," Beginda said, speaking during the discussion on the subject Tuesday.
Beginda and other speakers urged the ASEAN officials on the newly established ASEAN-EU FTA joint committee to be skeptical about studies that appeared to support the view that an FTA with the EU would be a good thing.
The European Commission said in April that an independent study showed that an ASEAN-EU FTA would boost EU exports to ASEAN by 24.2 percent, and that ASEAN would see its trade surplus with the EU increase by 18.5 percent in value terms.
Meanwhile, a report by independent researcher Alfredo C. Robles, a professor on international studies at De La Salle University in Manila in the Philippines, which was produced during the discussion, says that the promised gains from the FTA would turn out to be illusionary.
The report says that in the case of the EU-Mexico FTA, which took effect in 2000, the European Commission delegation in Mexico had predicted that Mexican exports to the EU would increase from US$4.8 billion in 1999 to $30 billion by 2005.
According to the report, in the first two years of the agreement, Mexican exports to the EU actually was in fact negative. Subsequently, Mexican exports did increase but only to $10 billion in 2006, far below the $30 billion predicted by the EU for 2005.
Moreover, Mexican imports from the EU grew rapidly, reaching $27 billion in 2006. The result was a steadily growing trade deficit, from $9.4 billion in 2000 to $14.2 billion in 2004 and $16.9 billion in 2006.
Robles, concluded that between 2000 and 2006, Mexico’s trade deficit with the EU increased by 79.6 percent.
The speakers at the discussion also questioned the liberalization of investment rules proposed under the FTA framework.
An FTA with the EU, a forum speaker argued, would force the 10 ASEAN members to adjust their investment regulations to meet the standards of the EU countries, which he said was inappropriate in the context of the ASEAN members, which had vastly different levels of development.
"FTAs promote investor rights and have a tendency to exacerbate existing inequalities between developed and developing countries," said Charles Santiago, representing an organization called Monitoring Sustainability of Globalization, a research and advocacy group based in Malaysia.
